Interest Rates Rise on Federal Student Loans for 2018-2019

Interest Rates Rise on Federal Student Loans for 2018-2019

 
 
 
Interest Rates Rise on Federal Student Loans for 2018-2019

Subsidized vs. unsubsidized

What's the difference? With subsidized loans, the federal government pays the interest that accrues while the student is in school, during the six-month grace period after graduation, and during any loan deferment periods. With unsubsidized loans, the borrower is responsible for paying the interest during these periods. Only undergraduate students are eligible for subsidized loans, and eligibility is based on demonstrated financial need.

 

Interest rates on federal student loans are set to rise for the second year in a row. This table shows the interest rates for new loans made on or after July 1, 2018, through June 30, 2019. The interest rate is fixed for the life of the loan.

  New rate 2018-2019 Old rate 2017-2018 Available to Borrowing limits

Direct Stafford Loans: Subsidized

Undergraduates

5.045%

4.45%

Undergraduate students only

Subsidized loans are based on financial need as determined by the federal aid application (FAFSA)

For dependent undergraduates:

1st year: $5,500 ($3,500 subsidized)

2nd year: $6,500 ($4,500 subsidized)

3rd, 4th, 5th year: $7,500 ($5,500 subsidized)

Max: $31,000 ($23,000 subsidized)

Direct Stafford Loans: Unsubsidized

Undergraduates

5.045%

4.45%

Undergraduate students only; all students are eligible regardless of financial need

For dependent undergraduates:

1st year: $5,500 ($3,500 subsidized)

2nd year: $6,500 ($4,500 subsidized)

3rd, 4th, 5th year: $7,500 ($5,500 subsidized)

Max: $31,000 ($23,000 subsidized)

Direct Stafford Loans: Unsubsidized

Graduate or Professional Students

6.595%

6%

Graduate or professional students only; all students are eligible regardless of financial need

Unsubsidized loans only

$20,500 per year (unsubsidized only); max $138,500 ($65,500 subsidized)

Direct PLUS Loans:

Parents and Graduate or Professional Students

7.595%

7%

Parents of dependent undergraduate students and graduate or professional students

Unsubsidized loans only

Total cost of education, minus any other aid received by student or parent

 

Patel Wealth Strategies, Inc. is a marketing name for securities and advisory services offered through FSC Securities Corporation, Member FINRA/SIPC and a registered investment advisor.  Insurance services offered through Michelle Patel are independent of FSC Securities Corporation. This communication is strictly intended for individuals residing in the state(s) of AZ, CA, CO, IL, IA, and WA. No offers may be made or accepted from any resident outside the specific states referenced.
 
 
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019.

*Securities and advisory services offered through FSC Securities Corporation, member FINRA, SIPC and a registered investment advisor.  Traditional/Fixed insurance offered through Moveo Financial Group, Inc which is not a broker dealer or investment advisor, and is not affiliated with FSC Securities Corporation.  2260 East Brown Road #6W Mesa, AZ 85213.  480-275-5219.  Michelle L. Patel is registered in the following states: Arizona, California, Colorado, Illinois, Iowa, and Washington.

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